Mining services provider Perenti Global says it is considering buying Downer EDI’s mining servicing business, but dismissed a report of a $700 million offer.
Downer is struggling with higher costs arising from loss-making construction contracts due to weak global business investment and a stuttering Australian economy.
The NSW-based firm slashed its profit forecast last month and flagged restructuring costs.
Perenti, formally known as Ausdrill, said the potential offer value of $700 million reported by the Australian Financial Review was “significantly above” what was being considered.
If an offer is made, Perenti said it would consider funding options, including an equity raising.
On Monday, AFR said Downer was seeking offers for the division by the end of the week.
Downer did not immediately respond to a request for comment.